TY - JOUR

T1 - The economics of orchards

T2 - An exercise in point-input, flow-output capital theory

AU - Mitra, Tapan

AU - Ray, Debraj

AU - Roy, Rahul

N1 - Funding Information:
*The authors thank Aloisio Araujo, R. B. Bapat, Doug anonymous referee for useful comments and suggestions. gratitude for a pleasant stay at the Instituto de Matematica Brazil, where a substantial part of this article was written. supported by a National Science Foundation Grant.

PY - 1991/2

Y1 - 1991/2

N2 - This paper is concerned with the qualitative properties of optimal intertemporal programs in a model of point-input flow-output capital theory, when future utilities are discounted. Under a mild condition on the flow-output vector, we establish that optimal programs for every discount factor and every initial state (other than a unique stationary optimal state) will exhibit non-convergence. Furthermore, we provide a necessary and sufficient condition on the flow-output vector for which a neighborhood turnpike theorem holds; that is, long-run fluctuations on an optimal program are "small" when the discount factor is "close" to unity.

AB - This paper is concerned with the qualitative properties of optimal intertemporal programs in a model of point-input flow-output capital theory, when future utilities are discounted. Under a mild condition on the flow-output vector, we establish that optimal programs for every discount factor and every initial state (other than a unique stationary optimal state) will exhibit non-convergence. Furthermore, we provide a necessary and sufficient condition on the flow-output vector for which a neighborhood turnpike theorem holds; that is, long-run fluctuations on an optimal program are "small" when the discount factor is "close" to unity.

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U2 - 10.1016/0022-0531(91)90141-P

DO - 10.1016/0022-0531(91)90141-P

M3 - Article

AN - SCOPUS:0002921783

SN - 0022-0531

VL - 53

SP - 12

EP - 50

JO - Journal of Economic Theory

JF - Journal of Economic Theory

IS - 1

ER -